The Tile Shop’s CIO Christopher Davis on cloud migration, AI integration

Shane O' Neill

Welcome to CIO Leadership Live. I'm your host. Shane O'Neill, freelance writer and consultant and former managing editor of CIO.com Before I introduce today's guest, I'd like to quickly mention our sponsor. Today's episode is sponsored by DataXstream, which develops AI-enabled sales execution from order to delivery for SAP.

Its flagship platform simplifies and streamlines complex sales order processes, which helps your company deliver exceptional customer experiences. For more information, visit them online at dataxstream.com.

Okay, So joining me for today's show is Christopher Davis, the Chief Information Officer at The Tile Shop, bringing 30 years of experience to the role.

Christopher is responsible for leading a 25 person team to support the Tile Shop's retail services, e commerce, marketing, infrastructure and security, customer service and supply chain.

The Tile Shop is a specialty retailer in the home improvement and building products industry, offering a wide selection of natural stone and man made tiles, along with maintenance materials and related accessories, all showcased in immersive showrooms across the US.

Founded in 1985 The Tile Shop now operates 142 stores across 31 US states with 1400 employees, Christopher joined The Tile Shop in 2020 as CIO. Prior to that, he held leadership roles at Express Oil Change in Tire Engineers and Sleep Number Christopher. Welcome to the show.

It's great to have you with us. Christopher Davis Thanks, Shane.

I'm really excited to have this conversation with you. Shane O' Neill

So I'd like to start off by discussing the industry at large, your industry at large, the home improvement sector, it has seen its share of disruption, like many sectors, from supply chain challenges to economic pressures and to just the way that consumers buy products.

Now, how have these industry shifts affected the tel shops operations, and what does that mean for your priorities as CIO, yeah. Christopher Davis

So as you look at the industry as a whole, home improvement has been drastically up and down over the last five years and even a little bit longer, perhaps. But as we look at it, you know, our competition has changed, especially in the hard surface flooring area.

We're seeing new products. We've seen bankruptcies. We've seen, you know, new players in the industry that before didn't exist. E commerce has just exploded. Everywhere.

We're seeing competitors in that space, and yet, brick and mortar omnichannel retail continues to exist, and we have to fight in that in that challenging environment. And as I think about it, you know, it's not just products or competition, it's really what we do.

There are fewer trades people these days. People have really started to ask the question of, well, who's going to do this work? For me, and a lot of our business is about having others do installation of tile or or, you know, laying that tile on behalf of people.

There's still some do it yourself, but many people say, who's going to do it for me? And with that, with fewer trades people, that makes it challenging from a labor cost standpoint.

So there's all of these technology demands to see, how can we simplify the installation process or provide products that make it faster or more effective or cost effective. You know, it's amazing how all of those things happen.

So with all of that as a backdrop, as I think about my role, my job is one to understand all of that, and then two, it's really to think about how to deliver capabilities for the organization that allow them to play in that competitive market.

You know, covid came, and we had to learn how to function in that and that was technology at its best, making businesses still operate when things were so difficult, tariffs come so there's cost implications, moving of product on a constant basis, forecasting, so making sure our forecast technologies are properly tuned and optimized.

You know, you mentioned logistics challenges. There were times when you have to suddenly ship product all the way around the Cape of Africa because we can't get through some of the channels that we needed to go through.

Or there's temp all sorts of things where I'm constantly being told of what. Happening in the world by our chief merchant. He mentions, well, the water is low, so you can't get through the canal. The Panama Canal doesn't have enough water to put all the boats through.

So now we've got to go all the way around South America. It's this constant basis of response, and so it's providing those tools for our business to be able to respond urgently when business is changing.

So that's really what it means for us and how we have to think about our priorities, because it is a constant change. In fact, as they say in retail, change or die, Shane O' Neill

change or die, right? Right. Wow, so many global issues. You know, you probably never thought you were you'd have to think about the Panama Canal as a CIO, but… Christopher Davis Not at all.

And you know, even the war in Ukraine all almost a lot of the white clay that is used in tile manufacturing comes from Ukraine. And so what do you do when you can't get white Ukrainian clay things of that nature, the you're constantly moving and changing our product.

And not only that, but in home improvement, it's really trendy. You know, people don't think of tile as fashion, but it's very much about fashion and design and so understanding those things, then means, okay, what are the technologies to support it? How can we ship things stably?

How can we keep the system stable so that our retail sales associates are not disrupted, and our customers have what they need when they need and those are all the types of things that I am constantly thinking about, Shane O' Neill

speaking of the of the customer and how the customer is always evolving, and customers often very fickle. And consumers today expect a kind of seamless, digital and in store buying experience.

I know that as a consumer, I use web search and social media and, of course, more and more chat GPT for research before I shop.

So how has the customer expectations, the continually evolving customer expectations, shaped your role over the past five years, since you became CIO, and how is that influencing the way technology supports the title shop? Christopher Davis

So I have a chief merchant who thinks about logistics and constantly, and how am I going to get product there?

And you know, today's world speed is everything they think about delivery and how fast it can get there, managing, you know, projects, you need to be on time, and delivering that product means we need to have good visibility to our entire supply chain.

So we've had to deliver capabilities for that. You know, people aren't necessarily willing to wait. So how can we manage those customer expectations to say, I know you love this tile. Can you schedule your work so that it's done here?

Because we need to actually get some product from overseas, because that's being manufactured in Italy or Spain, or, you know, in Asia, for example. So it's constantly having those conversations or saying, Oh, you have something urgent. Well, here's something I've got right now.

And being able to give visibility to our sales employees so that we can help the customer really understand their expectations we are selling process is very much a client telling consultative approach, if you will. And so we're constantly wanting to know what the customer is looking for.

You also see, as you mentioned, you know, what I call technology democratization, where we see technology today in people's hands that before you couldn't even fathom right, getting answers from copilot or chat GPT as quick as quick can be, and being able to do many other things that just a year or two ago were not fathomable.

That level of change means customers expect answers quickly, so that means our website needs to be faster. We upgraded our website in order to make sure that we had the speed and can deliver the capabilities that the customer expects.

It might mean that the visualization capabilities, because they say pictures worth 1000 words, but when you're doing a project in your home, you want to be able to see it, envision it, and so we're looking at ways to meet those customer expectations better than we've ever done before, being able to deliver design concepts.

So as I said, we're very consultative, and so making sure that we hear what the customer wants, know how to deliver it, and manage within the expectations and constraints that we have as an organization.

We need to give the information to the sales associates so that they can do that, and that's a little bit of how we constantly are thinking about technology is putting that customer in the chair.

In fact, I'm having an executive meeting, and we said we're going to have a chair, and it says, customer right there.

We have to remember what it is and why it is that we're doing everything that we're doing, we want to make sure that we meet those customer expectations. Shane O' Neill

And that ties into, I always think about omnichannel.

I don't know if you're a retailer, Omnichannel is everything, and what you just discussed about that that can you, can you give me maybe a little more details about the website as a place to do research and in the stores, in the showrooms that you have, I mean, the blending of the two to make it seamless.

It's very interesting. Christopher Davis

Yeah, for someone that does a home improvement project, for us, we've done research, and others have done research, and we've found that people in general, take 369, even up to 15, months for a kitchen remodel.

By the time you go from beginning concept to actually having the work fully installed, and you're cooking again in that kitchen.

I just actually went through a remodel myself recently, and the research that now people do to get ideas using social media like Pinterest or others, where they're gathering and gleaning the ideas, right?

It's this long cycle of research to try and figure out things, so if we can help them do that faster, is one of the things that we continue to think about, and E commerce and digital in general, whether it be social or, you know, e commerce or other types of media there, it's very, very tied together.

And so we have to think about, how can we help that customer move along their path, get the information that they need as quickly as they can. I was just having a conversation about, what more can we do to really refine and help people choose.

I was told once that the reason why you only have three to five brands typically in a grocery store is when you have too many brands, people can't actually choose and they just don't choose anything.

And it's the same way when we have so many tile options in our stores, our sales associates in the store can help refine that we need those same tools online to refine it so that we can actually help the sale or the customer figure out what it is that's going to meet their expectations, their vision of their their project, and make it easier for them.

So as we do that, we've, as I said, recently, upgraded our website, and we continually look to tune it so that customers get the answers that they want as fast as they can, and then making it easy for them to take those ideas and share them with the store sales associates when they come in to touch and feel it, see it in color, you know as much as you look at it on a computer, texture, you need to feel it sometimes, yep, yep.

Or how does it work in the light? And some tools can help with that.

But nonetheless, today, our world is very much omnichannel, like you say, where people research up front, they come in with an idea, but then we can help craft that and use our highly talented sales associates with the tools that we provide them, and hopefully even improve here in the coming months and year.

Here we're really looking to help with that sales conversion process so that they can answer the questions for the customers quickly, they can then get the product to them quickly, so that their project can get done that much sooner. Excellent. Shane O' Neill

You and I spoke a couple of days ago, and you had mentioned some tech initiatives that tile shops since you started a big cloud migration, and of course, you're talking about AI, can you, can you?

Can you tell us a little more about how you're maybe even get specific about those, about those deployments and how you're using them to serve customers and stay ahead of the industry? Christopher Davis

Well, one of the things. That we faced when I first joined the organization was that we were behind, and we've spent quite a bit of time to transform our technology footprint so that we can hopefully move faster and deliver those customer facing tools that are so critical.

We've done everything from like you said, migrate to cloud.

We're almost 100% cloud, and should be done by the end of the year, our ERP system, our point of sale system, almost every tool that we've selected over the last four years plus has been a cloud based tool, but it's allowed us to move that much faster and kind of leapfrog in many cases, because we were behind.

So that's been a huge initiative for us. And our team has done just amazing things, even though it's a small team for such a large number of stores and distribution centers, we've also done things like I mentioned, you know, you mentioned data extreme.

They're our point of sale vendor, and that's made it so much easier, because it integrates directly with our core ERP system. Our transactions are real time. We know exactly where our inventories are, our orders are, our customers, everything. Our websites fully integrated through API. So that's real time.

All of the data that we have is now real time, and there's so much that's been done to lay that foundation right.

And now what we're starting to look at is, as I said, customer facing, engagement, more the website and other tools like that, sales conversion tools helping our sales associates. That's just getting started.

You mentioned AI that's certainly in our works, and we can talk a little bit more about that.

But digital commerce again, we have upgraded the platform, and now we're starting to see incremental change on a constant basis, making it easier for checkout, making it easier to select product or search for product. We're even actually using AI to generate product listing pages.

They look at Google and see who's searching for what they call long tail searches like white subway tile for bathrooms. Well, let's create a page that's white subway tile for bathrooms, and you generate those types of things using generative AI.

Those are amazing, small wins that move the experience forward. And you know these technology capabilities, one of the things that I try to remind myself is technology, at the end of the day, is a tool to deliver value.

And sometimes people get really excited about a technology, but it's not necessarily driving value, and so we need to make sure we don't get excited about the technology, but instead, look for the business Shane O' Neill problem, right?

I think that's AI in a nutshell right now, topic of the moment of the year, probably of the decade, but there's also a lot of cautious optimism around it.

And you would, you had mentioned to me earlier about sort of the the opportunities and also the risks for AI and specialty retail.

And you, we all know it's going to get better, but right now it's in this kind of let's deploy it, let's use it, let's test it, but let's be cautious. Let's not have it do everything. Christopher Davis

Yeah, so as I think about it with AI, it all starts with the right data, and we've been working to really build our foundation so that we can get at the data we need and the analytics we need.

AI and machine learning in Analytics is a great use case, and one that we're very interested in using.

We're also, as I mentioned, looking at AI for visualization capabilities and how can we help the design process be more effective, so that the customer sees that picture, envisions what they're hoping to see, and if they can see it, then they're much more willing to make the investment.

And we really talk about it from an investment standpoint when you're doing these projects, these make a huge difference in people's lives. I can't tell you the number of pictures of bathrooms people have shown me saying, Look at my bathroom.

Absolutely and I just love the fact that we're able. Make a difference and make the experience in someone's home so much better.

I, like I said, Just finished my own remodel with my wife, and it just lightened and brightened the room so much that it made it feel airy and relaxing and so much fun to be able to be in the kitchen and enjoy that kitchen, and I think that's what we hope to do, so by giving the tools to our sales associates that do make a difference, or the answers through analytics to help them make good decisions in what makes a difference in helping a customer make the right selection of products, those types of things, I think AI will be great in the thing that I you mentioned the risks, part of it is making sure that you don't use AI for AI sake.

We actually, you know, have had a number of times in discussions where we've talked about putting a chat bot for our customer service team. That sounds great.

Our customer service team is so small, because most of our customer service is actually done in the store, that the return on investment was just not there. And so we said no, even though, logically it would make sense, absolutely but just a return on investment.

Discussion said, yeah, not right now, Shane O' Neill

maybe, if you, if you're a much, much bigger company with customer service agents, it might make, Christopher Davis

yep, at Sleep Number we had 300 agents at the time I was there, and I'm sure you know, it's very large customer service focused area, and those types of places would really benefit from being able to answer those questions more quickly, and being able to answer the question for the customer without having to make a phone call.

You know, some of that is helpful for us, but not to the same extent that it might be for others.

And so I try to remind myself, AI is a tool, just like every other technology, whether it's a tablet, whether it's a phone, whether it's software to you know, do design whatever the tool is, we need to make sure that those tools are used with a purpose in mind, really answering why, and getting the results or the return that the organization is looking for.

Because at the end of the day, that's the point as a CIO. I need to operate as a business person first, and a technologist, okay, Shane O' Neill

yeah, is if, if it's AI, if it's not bringing business value. Now, wait until it does, Christopher Davis

yeah, prove it out. Test it. Learn some things, and in some cases, you just say Not yet. Shane O' Neill

Switching gears slightly to talk about talent and staffing, recruiting, it's a bit it's a obviously a big topic at any at any company, for any executive. So recruiting and retaining it. Talent can be tough in today's market. What strategies have you found effective for building strong teams? Yeah.

Christopher Davis

So one of the things that I've been thinking about is, and more than thinking about it, it's something that I've always been attentive to, is really knowing your organization, knowing its culture, and finding good fit for the team that you do build and hire, or the partners that you engage in some cases, and so that's a key factor in recruiting and retaining top talent.

Just because they're the smartest person in the room doesn't necessarily mean they fit the culture and can operate. So that's one of the things that I try and really look for in order to build those strong teams.

The second thing that I try to remind myself is that, at the end of the day, all of the work that we do is transient. It's you might build something and it's gone in three years.

You know, I've done I've done that multiple times, and so I try to remind my team that part of the objective is to meet the business needs, and remember that what you learn and the relationships that you build are what's going to be most critical, so that if you have those relationships, the team is going to have probably more fun first of all, and second of all, they really value working as a team and feel success as they stay focused.

And focus is something that I talk a lot about with my team, and so making sure that they don't do everything, but instead. That they do the right things. And so we talk constantly around priority, is this really critical?

And so recruiting and retaining, really it's about having the right focus, the right priorities. And then I was taught long ago by a former CEO of Sleep Number about five steps of accountability and help people feel accountable. And if you hold them accountable, they're successful.

And this idea of vision, you define a vision for the team, like we said, cloud first, right? That was one of our vision points. And then you define the expectations transfer the responsibility to the team, and our team has done amazing things because of that.

It's really been impactful. And they've grown, they've learned. And I think oftentimes people simply want to be challenged and learn things. And so one of the things that I think a lot about is with retaining people, is developing them and so giving them those opportunities.

I just had a conversation today, in fact, where I was talking to a young man who has been growing in our service desk, and we talked about ways that he can do new things. You know, I've had some people have great opportunities and have left the organization recently.

And I said, Well, how do you feel about doing this? And he's like, that'd be awesome. And just getting that excitement and painting a picture of opportunity to say, hey, you can do this. Why don't we experiment with this?

So I'm actually partnering him, probably with someone from marketing to work with our sales team on some of those tools that we talked about to help with sales conversion and helping them visualize the solution.

Because these AI tools really can do many things, and if we can experiment and learn and develop someone along the way as well. Then those teams want to be here that they get excited about things, and that's how you retain that talent.

I look constantly for on the job training type of things, you know, give them the chance to get a certificate or get some training from a vendor tool that they're interested in learning about.

There's so many ways that they can learn, and that's been one of my big areas of opportunity, as well as one that just comes to mind as maybe a last thing that I'll say is giving people your trust.

And what I mean by that is if you do the five steps of accountability, transfer that responsibility, and then you coach and mentor and follow up those things make them feel empowered so that they can do it, and they step up to the challenge.

And stepping up to the challenge means they're they're committed to the organization, and that's how you keep and build those teams. Well, those are great insights. Shane O' Neill

Somewhat in the same vein, I'd like to talk a bit about your relationship with other senior the C suite, other senior leaders. As CIO, you're part of the C suite, but you're also deeply involved in working with teams to deploy and execute technology.

So what's your approach to communicating the business impact of your area of expertise, technology, to the CEO and Christopher Davis

to the board, yeah. So I mentioned earlier being first, a business person and a second, a technologist.

That's probably step number one, yep, in that success that I have been able to build, especially here at The Tile Shop over the last five years, when I know the business, I can talk about the business, I can ask questions.

I spend time in the stores seeing what's happening. I was walking through the store yesterday with our Merchant, and she was showing me actually our designer, I should say, and she was showing me what things were looking like and how it was going to be merchandised.

And I can ask questions.

And there's that trust that you build so that when you do have the conversation around technology, they already know that you're thinking about the business and want them to be successful in their particular role, whether that's the CEO, whom I report to, or the CFO or even the board, really remember who you are, who you report to.

Do. And ultimately, think about how you can help make them look good, right? Everybody wants to look good. Everyone wants to be successful.

And if you think about it from that standpoint, and you're delivering those things that are going to make their life easier, you're going to be more successful. And then I'll go back to the ROI, right?

The Board of Directors, they they care about value, so making sure that you're talking about value, not technology, right? For technology sake, right? What's the really talking about the outcome? Right?

How, what what is this going to do to drive sales, or what is this going to do to reduce margin or mitigate risk? Really, when I talk to the board or oftentimes to see fo or CEO, it's talking about those three levers, risk, cost, revenue, right?

It's really just those things, and if you can talk in those terms that they understand, then you're more likely to be much more successful in communicating with them, persuading them, or influencing them. Hopefully, it's not just persuasion, but actual influence that says, hey, there's value here.

Let's, let's go after this. And by having those value conversations, you can do that. You know we talked about my my reporting relationships, but I also have relationships with our employees and with our customers, and I have to think about those as well.

How am I servicing them and supporting them so that they can be successful in their job? I'll tell you right now, if the sales people are happy, my CEO is happy, you know, with me, Shane O' Neill

that's that they're all interconnected that way, right? Christopher Davis Yeah, exactly.

And so it's always trying to remember those things, remembering to deliver the value. And sometimes they can be simple things. I remember a time when I was in a store many years ago and I was talking to a sales associate just trying to get input.

Hey, what do you need? What would be helpful for you to be successful? And they said, Well, I used to have these videos right on my tablet, and now I have to link to some website. And sometimes it works and sometimes it doesn't.

Can you just put the videos back on my tablet and such Shane O' Neill

Help me close more deals? Right? Christopher Davis

Help them close more deals. Yeah, exactly. And so it's constantly thinking, why am I doing this? What is the business value? And how can I help those relationships and those individuals that I have responsibility to and and with Shane O' Neill

be as successful as possible. Great. I think that's a good note, note to end on. Thank you very much, Christopher, for being with us. It's been a pleasure talking to you. I've learned a lot about your team's challenges and accomplishments. So thanks again for being here. Christopher Davis

Thanks so much for your time today. It's been enjoyable. Shane O' Neill

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